Hoyer Statement on Tax Collection Responsibility Act

WASHINGTON, DC - House Majority Leader Steny H. Hoyer (MD) spoke on the House Floor today in support of the Tax Collection Responsibility Act. Below are his remarks as prepared for delivery:

"Today, through this important legislation – the Tax Collection Responsibility Act – this House will reiterate that the collection of taxes is a core governmental function that should not be contracted out to private companies.

"But no one should be mistaken. Our objection to the private collection of taxes is not simply philosophical. It is practical, as well.

"First, there simply is no evidence that private tax collectors are more efficient. In fact, the opposite is true.

"IRS Commissioners repeatedly have testified before Congress that IRS employees could do this work more efficiently. In fact, according to the IRS, the return on investment for IRS employees doing work similar to private collection agencies is 13-to-1, while the private collection agencies’ return is about 4-to-1.

"Second, with Americans legitimately concerned about the privacy of their personal information and identity theft, I do not believe it is good policy to turn over Social Security identification numbers and tax information to private collection companies.

"And third, the National Taxpayer Advocate has raised concerns about the tactics used by private collection agencies, including intimidation and harassment.

"The fact is, private tax collectors are keeping 21 to 24 percent of what they collect, and are allowed to keep up to 25 percent under the law. Thus, with the compensation of private collection agencies directly tied to what they collect, they are incentivized to use aggressive tactics.

"On the one hand, Republican-controlled Congresses have cut the IRS workforce by 20,000 since 1995. In fact, just this year, they offered an amendment to the Financial Services Appropriations Bill that would have cut IRS funding by 8.9 percent.

"And, on the other hand, they complain that we must allow the government to hire private collection agencies because the IRS does not have the resources to recover all income tax that is owed.

"I think we all know the most effective solution. We need to provide the IRS with the resources it needs to ensure that all taxpayers pay their fair share under the law. This legislation is an important step in that effort. I urge all of my colleagues to vote for this bill."